Advocates say taxation and regulation of companies like Airbnb could raise millions in taxes; opponents say it could hamper the industry

State lawmakers believe they can unlock millions of dollars in untapped tax revenue by regulating and taxing short-term rentals facilitated by companies such as Airbnb at the same rate as hotels – although opponents have warned that a legislative overrun could lead the industry out of state.

AB363, sponsored by MP Rochelle Nguyen (D-Las Vegas) and heard Thursday at the Assembly’s Revenue Committee, would establish requirements, rules, enforcement mechanisms and tax collection methods for short rentals term negotiated by companies such as Airbnb, Vrbo and other third party party services that rent out rooms, apartments and houses for a short period.

The bill has drawn a wide range of supporters, including the Nevada Resort Association, the Culinary Workers Union, real estate associations and progressive groups, who have identified the lack of regulation of short-term rental as the one of the reasons for the out of control party houses, a shortage of affordable housing. accommodation and siphoning of clients away from established resorts and hotels.

Opponents of the bill, however, have warned that the regulations will reduce tourism revenues, reduce the growth of the state’s short-term rental market and undermine individual property rights – Airbnb officials have said. wrote in a letter that the original bill “would essentially ban any significant short-term rental activity.”

For her part, Nguyen said she did not believe that the outright ban on short-term rentals was the right political solution, but that lawmakers needed to have some oversight over the industry.

“For now, I suggest you look at your app for Airbnb, or HomeAway, or Vrbo or one of the other types of apps, and you’ll see hundreds, if not thousands of listings, most of them operating illegally,” she said, reference to the official (but rarely applied) ban on short-term rentals in Clark County unincorporated. “We don’t collect these taxes, we don’t collect these revenues, so I think there has to be parity in this situation.”

The bill would require cities or counties to include short-term residential spaces in the definition of “temporary accommodation” – meaning they would be subject to the same taxes hotels charge guests. It would also create a process requiring anyone renting a room or space to apply for a permit, pay an annual fee to maintain that permit, appoint a local representative for the rental, and maintain liability coverage for their unit.

The measure could have substantial tax benefits for state and local governments – Airbnb alone estimated in a letter opposing the bill it could have collected and paid up to $ 14.5 million in hotel room taxes on behalf of the hosts in 2019. The taxation of short-term rentals was also mentioned by Assembly Speaker Jason Frierson as one of the potential funding solutions to address recent recommendations from the School Funding Commission aimed at increase spending per student up to the national average.

Nguyen described the measure as a “dynamic working document” – noting that according to her tally, she had held around 72 meetings, phone calls and video conferences with individuals and interest groups on the measure ahead of the hearing. Thursday, and expected even more changes. to come in the enforcement aspects of the bill.

“Will this be a perfect bill?” ” she said. “No, no bill exists, but it is definitely a step in the right direction.”

The invoice, plus one conceptual modification presented to committee members on Thursday, included these provisions:

  • Set a minimum stay of two nights for any short-term rental, excluding owner-occupied properties
  • Limit occupancy for short-term rentals to 16 people with four occupants for the first bedroom and two additional people for each other bedroom in the house
  • Establish a minimum distance of 500 feet between all short-term rentals, except for units in a multi-family dwelling
  • Establish a 2,500-foot separation between the property line of a resort hotel and a short-term rental that is a single-family residence
  • Limit the percentage of short-term rentals allowed in multi-family housing to 25 percent
  • Prohibit short-term rental owners from holding more than five permits
  • Require short-term rental owners to have a designated local representative who is responsible for the rental and available 24 hours a day, seven days a week to respond to any issues.

The Conceptual Amendment would also apply to any approved short-term rentals pre-existing in the provisions of the bill, and would only apply to a county with more than 700,000 residents, which means it does not would apply only to Clark County.

Local governments would have the power to suspend a permit or impose fines or penalties if someone breaks the ordinance, but could not outright ban short-term residential rentals. The bill also requires individuals or entities renting space in a residential unit to pay taxes to the county or city, as the case may be.

Assembly member Tom Roberts (R-Las Vegas) said he plans to co-sponsor the bill and that another enforcement-focused amendment is coming to give law enforcement and law enforcement agencies. Code application plus tools to combat non-compliant rentals.

“I’ve known from my law enforcement days that (the short-term rentals) and the bans we have in Clark County are causing a number of problems for neighborhoods across the valley, and our police officers don’t don’t have the tools to control them, neither do code enforcement, ”he said.

This is not the first time that state lawmakers have attempted to tackle the issue of regulating short-term rentals – lawmakers in 2017 approved a bill, AB321, authorizing local authorities to adopt a decree obliging short-term rental platforms to submit quarterly activity reports, including income from housing rentals.

However, this bill failed to address the current patchwork network of short-term rental regulations found statewide – only three counties (Clark, Washoe, and Douglas) and a handful of cities have passed. formal policies on short-term rentals. Policies range from total bans (Clark County unincorporated) to only owner-occupied homes (City of Las Vegas) to requirements that every unit have a landline (City of Mesquite).

Airbnb lobbyist Adam Thongsavat said that while the company believed the concept amendment offered a fair and balanced approach, it was still concerned that a buffer around gambling establishments, distance requirements between rentals at short term and a two night minimum does not help Nevada’s tourist economy. recover.

“Now is the time to help bring visitors to Nevada in a safe and healthy way,” Thongsavat said.

Other opponents felt the legislation did not go far enough – Ronda Tycer, a resident of Incline Village, chair of the town’s citizens’ advisory group on short-term rental, said she opposed the cap County population (Washoe County, which includes Incline Village, has adopted its own short-term rental policy in March).

“The current Washoe County ordinance does not protect our neighborhoods or our community in Lake Tahoe,” Tycer said. “After two years of advocacy with the county, we still have no limits on the number or location of [short-term rentals] throughout our Lake Tahoe community.

Many Airbnb hosts have also called for opposing the legislation, citing fears of lost income and noting that their short-term rentals do not disturb the peace or affect neighbors.

“My house is not noisy or disturbing my neighbors. If it was, I wouldn’t have been able to run this business successfully for four years, ”said Melissa Cassidy, Las Vegas resident and Airbnb host. “There are all kinds of travelers. Let’s go with the world and give them all kinds of options in Vegas. I miss the accommodation. I miss my guests. I urge you to make Airbnbs legal, but without the arbitrary distance restrictions offered. “

However, supporters welcomed the additional regulations to ensure a “level playing field” for hotels and gaming industries.

“[AB363] protects residential neighborhoods, communities and affordable housing, and equitably demands [short-term rentals] to pay the transitional lodging tax, just like our resort hotels do, ”said Boyd Gaming lobbyist Russell Rowe.

Jim Sullivan, a Culinary Union lobbyist, said additional restrictions on short-term rentals were needed to deal with the state’s continued lack of affordable housing; Short-term rentals are often blamed for contributing to the housing shortage as investors buy properties with no intention of long-term rental. He said workers on the Strip with variable hours of work also complain about the prevalence of rented party houses.

“Workers have complained about party houses preventing them and their neighbors from sleeping at night, and turning their neighborhoods into unruly and unofficial resort areas,” he said.

Local governments not affected by the bill expressed gratitude for the concept amendment, but Wesley Harper, executive director of the Nevada League of Cities, objected to the burden the bill places on small county jurisdictions. of Clark with limited finances or staff.

“We hope that the committee will examine this bill carefully and respect the competence of local governments to govern well based on the direct and unique needs of our residents,” said Harper.

Lawmakers took no immediate action on the bill, which was exempted from legislative deadlines. Nguyen said she would continue to work on issues raised by opponents of the bill, but reiterated that lawmakers likely need to do something about the issue this session.

“I think it’s a step in the right direction,” Nguyen said. “The genie is out of the bottle and we have to tackle it head on. “

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